A business is any activity that generates income for you without your presence. In this write up, the word business would be used to describe all kinds of business like sole proprietorship, partnership, and corporation. Most of these businesses carry certain distinct features like legal entity distinct or different from its owners and can act on its own by utilizing its legitimate rights, power and authority. Sole proprietorship does not have the feature separate legal entity.
A business is able to serve a larger community than an individual and a business is expected to be a going concern or is expected to have a perpetual life. Sole proprietorship usually has the shortest going concern because the death of the sole proprietor can render the business closed. Under normal circumstances a business could be passed unto generations to run and serve society.
When one owns a business, one could relieve oneself from many expenses and one can enjoy many privileges from the business, provided the business attains a certain status and is really law abiding by meeting its tax obligations and other statutory responsibilities. You can set up a business yourself or buy an existing business. Whichever, a business is a business and what is important is that it exists and is capable of generating revenue for you and is serving its target market.
There are several things that are required for a business to be successful, human resource issues, cash flow and book keeping issues. Owners of businesses should employ the right people to stir the affairs of the business for it to function and continue to be a going concern.
The cash flow of the business should be a critical factor, because the business cannot exist without money to operate. There should be cash flow management measures in place and these measures should be adhered to and implemented. It is essential for business cash to be spent on budgeted items only and should be captured in the books of account.
Every business needs initial working capital, aside the fixed assets and human capital to operate effectively. Working capital is the cash needed for the day to day running of the business.
If the business is an existing one, its working capital should be expanded and consolidated. Without working capital, it is very likely to run into debts that could have been prevented, because things done on credit for the business would always be more expensive, especially when your suppliers know you might not be credit worthy, than when done with cash. Yes, it is better to transact businesses on credit but that would be after your business counterparts know you very well and believe you have a reputation and that you are really credit worthy.
Marketing of the organization’s products or services is crucial to the well-being of the organization and this could help sales flow in so the business could make some good cash. Without vigorous marketing and sales of the products or services, the business has no future. It’s expected that every entrepreneur should be able to sell his or her own products or services very well and hence should be able to hire people like him or her or better than he or she to make good sales for the business.
Every business should have very strong and robust internal controls to cater for administration, accounting and finance and other departmental needs. Approvals and authority levels clearly spelt out. Segregation of duties for employees is clearly done and allocated. That management is not overwriting its own rules and the integrity of management is not questionable.
Internal controls should be designed in such a way that they should help prevent, detect and correct fraud and similar instances.
If the business has no internal controls, it will not last and shall be closed down in no distant future. The internal controls in fact are the tools intangible that would concretize and make it perpetual.
A business must be backed by a good legal system, meaning, it should protect itself against its competitors by having good lawyers to act for it and it should also be law-abiding to meet all its legal and statutory obligations.
All businesses in the world only exist when they have product(s) and or service(s) to offer to the world else, it is an impossibility to get from the world without giving it anything in return.
Once, again, there is nothing for something in the world.
The business must have a product or service to give to the world and get back from it. The business could increase its product or service lines as and when necessary after doing the necessary marketing survey and research. The product or service should be packaged well to be attractive, catchy, appealing, durable and trusted.
The privileges of having a business are:
· The business could protect your assets for you
· The business could bear all personal expenses for you
· The business could serve a larger society than you doing it alone
· The business generates income for you while you sleep
· The business could pay tax in larger amounts than you would pay yourself to aid national development
· The business could be passed unto your children
· The business can contribute to environmental friendliness and sustainability development
· The business opens many doors of opportunities and gives you the opportunity to meet many learned and prominent people
· If you have your own business, you are your own boss and you not answerable to anybody
· If you have your business, you can have time to attend to other important, personal matters and still make money
· If you have a business, your money works for you, while you concentrate on other important matters
It is not only entrepreneurs, who should have businesses, employees could also have businesses and at the same working diligently for their employers.
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